Housing Preservation

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Resident ParticipationIn HUD Affordable Housing Preservation

Projects:What Works?

Deb Goldberg Gray

University of California Center for CooperativesSeptember 2000

Funding for this research was provided by:

The California Department of Housing and Community Development


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ISBN: 1-885641-27-3

The Regents of the University of California, 2000

Edited by EditPros

Printed in the United States of America

Center for CooperativesOne Shields AvenueUniversity of CaliforniaDavis, California 95616Web site: http://cooperatives.ucdavis.eduE-mail: [email protected]

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CONTENTS

Executive summary 1

1. Introduction 3 Overview of affordable housing preservation Why resident control? Resident control of what?

2. Case studies 6 Sample and methods Site summary table Project profiles Foothill Plaza, Sacramento Glenridge Apartments, San Francisco Astoria Gardens, Sylmar Su Casa Por Cortez, Encinitas

Turnagain Arms, Fallbrook Cedar Gardens, Fresno

3. Key players, key issues 25 Residents HUD Non-profit or other ownership entity Management company Tenant assistance groups

4. Conclusions and recommendations 28

Preserve a system of checks and balances Institutionalize resident training Work with HUD to recognize resident groups as legitimate partners

5. Best Practices to Promote Resident Participation and Empowerment 32 Multi-site approach

Sacramento Mutual Housing Association, Anti-Displacement Project Regional alliance model

Los Angeles Countywide Alliance, San Diego Countywide Alliance Local preservation programs

San Francisco Redevelopment Agency

6. Supporting resident participation in HUD affordable housing: 38 Current climate and strategies for preservation Options for resident participation in tax-credit buy-outs Public policy to promote resident participation Funding needs

7. References and key contacts 40


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Resident ParticipationIn HUD Affordable Housing Preservation Projects:

What Works?

Executive summary

This research addresses structures and issues in resident participation in six very distinct HUD proper-ties in California. Each of these properties went through a buy-out process in the period 1992-1996.During that process residents participated in choosing a non-profit partner, or creating their own non-profit or cooperative corporation to take on ownership of the property. As the first generation of HUDexpiring use buy-outs in which substantial resident participation and control was encouraged, theseproperties lend themselves to an assessment: Several years after the buy-out, how are the originalparticipatory structures functioning? What models work best, and where have difficulties arose? Andfinally, how can these findings inform future affordable housing preservation efforts?

This report examines and evaluates the participatory structures established at the following sites:1. Foothill Plaza, Sacramento2. Glen Ridge Apartments, San Francisco3. Astoria Gardens, Sylmar4. Su Casa Por Cortez, Encinitas5. Turnagain Arms, Fallbrook6. Cedar Gardens, Fresno

Key factors in the ongoing well-being of these sites extend beyond residents to HUD policies and theindividual asset managers who carry them out, tenant organizers and advocates, and non-profit organiza-tions devoted to the preservation of affordable housing. While the projects covered in this report all werepurchased through HUDs Title 2 or Title 6 program, future purchases of HUD affordable housing stockare likely to be financed through tax credit purchases, which will introduce the role of the for-profit investor

into the equation.

Conclusions

The project profiles included here must be considered in light of the ultimate goals of affordablehousing preservation. A successful preservation effort ensures long-term affordability on site, whilesupporting the highest possible quality of life for residents. Quality of life starts with decent, safehousing, and can expand to include truly positive experiences in community, and access to trainingand educational resources which may give individual residents the boost they need to move on tounsubsidized housing. Resident participation and control must be evaluated based on its contributionto the goals of long-term affordability and quality of life on site.

The benefits of residents control and participation are recognized by HUD, non-profit affordablehousing developers, resident advocacy groups, and the residents themselves. The diverse interestscommitted to the preservation of affordable housing recognize resident participation as a way to:

Improve the overall management of the property Protect resident interests Create a community/social support system on site Empower residents as a group and individually Give individual residents the opportunity to build skills based on their participation.

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However, as illustrated in the case studies, challenges and limits to resident-participation are alsoapparent: Ownership and governance of HUD-subsidized housing is a complex task that requires alevel of competence and sophistication beyond that required of home owners in a traditionalunsubsidized context. Challenges to resident control include:

Complying with HUD regulations Operating in a multi-lingual, multi-cultural environment

The need for capacity-building for low-skilled groups.

Recommendations

Resident participation has the potential to improve the overall management of a property in bothquality and cost-effectiveness to protect resident interests, to create community and a social supportsystem on-site, empower residents as a group and individually, and give to individual residents theopportunity to build marketable skills based on their participation. For these reasons, HUD encour-ages and supports resident participation. The following recommendations are offered to ensure thelong-term preservation of high-quality affordable housing in California.

1. Preserve a system of checks and balances Maintain the benefits of resident participation and control while instituting a system of checksand balances through an annual social audit.

Mandate oversight of board elections.

2. Institutionalize resident training and outreach Establish structured orientation program for all new residents. Provide training for all new board members. Organize and fund opportunities for residents to meet, learn and strategize with their peers

from other HUD-subsidized complexes. Develop sustainable funding for assistance to resident-controlled properties.

3. Work with HUD to recognize resident groups as legitimate partners Enlist the support of HUD community builders. Support a consistent approach for uniform use by HUD asset managers.

A sampling of best practices illustrates initiatives by residents, non-profit housing developers and localgovernment that most effectively address common barriers or limitations to resident participation. Thereport closes with observations on the current climate for housing preservation, which is much lessconducive to resident participation and control than during the 1986-1996 time period, whenLIHPRAH and ELIHPA provided significant funding and options to residents faced with a buy-out. Keyissues for the future include identification of effective structures for resident participation and controlwithin the tax credit buy-out model; encouraging resident input any time an additional investment of

public resources may be made to a property, whether for a transfer of ownership, or to support anexisting owner; and establishing reliable income streams to support resident outreach, organizingand education.

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1. Introduction

Overview of affordable housing preservation

The preservation of HUD affordable housing refers to efforts to retain the current stock of federally

subsidized housing as HUD use restrictions expire, resulting in the potential for the conversion ofpreviously subsidized units to market rate. The primary goal in preservation of this at-risk housingstock - housing with expiring use restrictions and a for-profit owner- is ensuring long-term affordability,generally through transfer to an ownership entity committed to maintaining affordability indefinitely.Coupled to the goal of maintaining the nations affordable housing stock to serve a growing need isan interest in providing the highest possible quality of life for residents of subsidized housing.

All properties profiled in this study were purchased under the ELIHPA (Emergency Low Income Hous-ing Preservation Act of 1987) or LIHPRHA (Low-Income Housing Preservation and ResidentHomeownership Act of 1990) preservation programs. The programs, also known as Title 2 and Title6 respectively, required owners to notify HUD before prepaying restricted-use mortgage loans, and

favored resident or non-profit purchasers in cases involving existing owners who chose to opt out ofexpiring HUD contract obligations. Both programs addressed the need to preserve our nationsaffordable housing stock through transfer to a non-profit owner or other entity committed to preservinglong-term affordability.

Beyond a commitment to preserving affordability, new purchasers through LIHPRHA and ELIHPA wererequired to work directly with residents, to ensure a transition that recognized resident interests andneeds. Residents voted to select and approve purchasers, and generally received ample assistancefrom outside tenant education groups to fulfill their role and best meet their own needs, as they wentthrough the buy-out process. In 1996, when Congress discontinued the LIHPRHA program, owners ofHUD-subsidized building regained their right to pre-pay mortgages, and raise rents to market rate orsell their properties on the open market.

From 1987 through 1996, when LIHPRHA and ELIHPA financing was available, residents of HUD-assisted multifamily properties had the rare opportunity to form their own non-profit association topurchase their complex. The programs favored resident participation and control, and resulted in anumber of fully resident-controlled purchases, as well as other purchases by non-profit and residentpartners. The sites examined in this report were all acquired under the LIHPRHA or ELIHPA programs.

Why resident participation?

Residents have a personal stake in the long-term success of the property

Advocates for resident control argue that tenants have the greatest stake in their own housing, andtherefore are the best candidates for the stewardship of the nations publicly subsidized affordablehousing stock. As consumers of HUD affordable housing, they naturally will do everything possible tomanage their complexes efficiently and in a manner that will engender the highest quality of lifepossible on site.

Resident participation contributes to the quality of life on site

Support for resident participation in the decision-making and creation of policies that most closelyaffect them is in keeping with HUDs Strategic Goals of empowering people and communities, as

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well as restoring public trust. As promoted in HUDs Management Handbook 4381.5 (12/94),The participation and cooperation of residents is important in creating a suitable living environmentand can contribute to the successful operation of these properties. For example, resident involvementcan help maintain the physical condition of the property, ensure proper maintenance, improve secu-rity, contribute to improvement in energy efficiency and control operating costs.

As delineated in the handbook, several factors favor resident participation as an ingredient for

optimal performance by HUD properties:

Residents know the property better than any outsider, and can assist owners, managers andHUD as allies in detecting and addressing maintenance and security problems on site.

As stakeholders, residents who have a role in the governance of their own housing are mostlikely to actively contribute to the quality of life on site.

Resident organizations and other community links amongst tenants will contribute to securityand development of proactive social activities on site.

At properties included in this study, residents contribute to the physical well being of their propertythrough resident-driven landscaping and maintenance activities, as well as active partnership with

maintenance staff. Resident contributions to the social well being of the property include mobilizationto address security issues through a formal neighborhood watch along with informal looking out foreach other. Resident-driven social programs include academic and social activities for children andyouth visits to the elderly, informal translating services provided by bilingual neighbors, and neighbor-to-neighbor tutoring on computer and job-search skills.

Empowered residents gain the skills and confidence to improve their financial situationand move on

Resident control, and the education, empowerment and leadership development associated with it,serves the ultimate goal of subsidized housing, which is to assist residents in gaining the skills andresources to move on to non-subsidized housing.

In a study comparing social conditions and outcomes at two HUD-subsidized housing complexes -similar except for differing levels of resident participation - Mushrush et al (1996) found higher levelsof resident participation linked not only to a higher sense of security and satisfaction on site, but alsopersonal growth by residents. Mushrush tells success stories of resident leaders at River CommunityHomes, a resident-controlled complex in Arcata, Calif. One former board president at the RiverCommunity Homes left for graduate school and joined an artists co-op, because now she knew howto get things done. Another former board president who was moving to a private residence ex-plained that she wouldnt have done anything if she hadnt had the positive role models of herneighbors and learned skills from the board experience.

The testimonials recorded by Mushrush are typical of the stories from resident-controlled complexesincluded in this study. Organizers bemoan the loss of key resident leaders, as the individuals whorise to the challenge of leadership in their housing communities acquire the skills and confidence tofind better jobs and move on to non-subsidized housing. Some resident leaders, like Tony Morales,now an organizer at Los Angeles Coalition for Economic Survival, find a career in tenant advocacyafter cutting their teeth in a personal housing struggle.

Resident control of what? Defining the scope of resident participation

Sites visited for this study represent a broad range in governance structure and scope of resident

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participation and control. During buy-out, most resident groups went through a process of definingtheir common interest in controlling their property, and negotiating with HUD or a non-profit partnerbased on their preferences. Residents, advocates, HUD officials, and non-profit housing developersinterviewed for this study all pointed out that resident groups vary widely on how much control theywant of their site, and that, above all, those preferences should be heeded in developing a gover-nance structure.

The ultimate division of responsibilities on a given site will depend on resident capacity and interest,funding availability and administrative requirements. Any of the following roles and responsibilitiesmay be assumed by residents in the ongoing ownership and management of HUD-subsidized proper-ties.

Ownership

Residents who assume ownership control of their property through either a residents-controlled non-profit or cooperative corporation must have the capacity to manage their property indefinitely,whether directly or through a management agent. In addition to ensuring ongoing fulfillment ofmanagement tasks, owners must be in a position to qualify for financing in the first place, and mustbe able to take on the risk associated with owning a property. They must demonstrate the financialand organizational resources to gain HUD approval for the purchase, and win the trust of any inves-tors or financial institutions participating in the purchase.

Management

In their work with resident groups in Los Angeles, Coalition for Economic Survival organizers presentproperty management roles as follows:

Occupancy: develop waiting list, maintain occupancy list, fill vacancies, bill for rent, collectrent, obtain subsidies, serve notices, evictions

Accounting: Receive/deposit rent, receive/pay bills, maintain financial records, provide

financial statements to the board Operations: prepare operating budget, prepare reports for board, prepare reports for HUD/

other interested entities, obtain professional services, obtain bids on large projects, obtaininsurance

Maintenance: inspect units, develop maintenance plan, dispatch maintenance workers,purchase and maintain tools, evaluate maintenance performance

Membership: communicate with membership, distribute information, evaluate quality ofmember relations

During buy-out, organizers work with residents to determine how much control they want, and withinthe scope of resident control, which tasks and roles residents want to take on as a group, and which

should be contracted out.

Traditional resident association role

Even in situations in which residents have a limited role, a residents association typically participatesin the development of house rules and undertakes social and educational programming on site. HUDguarantees certain basic rights to residents, as articulated in the pamphlet Resident Rights and Re-sponsibilities (12/99). These include the right to organize, to use common space, and to receivetimely response to requests and complaints made to management.

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Resident preferences in level of participation and control

Amongst the resident groups interviewed for this report, the most independent are members of theGlenridge Apartments cooperative. Residents not only perform all ownership tasks, including inter-face with HUD, with no outside assistance, but also the board of directors is currently considering atransition to self-management for the 275-unit complex. Glenridge is a mixed-income complex whoseresidents include legal and finance professionals. Interviews with residents reflect a culture of inde-

pendence at least amongst the leadership group, reflecting experience and political clout that theyhave gained in winning HUD approval as an ownership entity.

Conversely, ownership responsibilities at Fresnos Cedar Gardens pass entirely to ACLC, the non-profit partner. Residents organize a neighborhood watch and some social programming throughtheir resident association. They enjoy a good relationship and open communications with their non-profit sponsor, with resident participation on the joint governing board operating at a token level.

2. Case studies

Sample and methods

Site selection for the interviews and observations that form the basis of this report was guided by anumber of factors. The researcher worked with a team of tenant education groups and low-incomehousing specialists in California to identify HUD preservation properties and determine the bestcandidates for case study analysis.

This study strives to assess the broadest possible array of ownership and control structures withinHUDs Title 2 and Title 6 preservation properties. Therefore the primary criterion for inclusion in thestudy was diversity, first in participatory structure, and then in geographic location, demographicpopulation served and project size. Beyond those criteria, preference was given to resident groupsserved by partner groups on the project - California Coalition for Rural Housing (Sacramento), San

Diego Legal Aid, Coalition for Economic Survival (Los Angeles) and Housing Rights Committee ofSan Francisco). Finally, in the interest of longitudinal study, projects featured in the video TakingControl (Center for Cooperatives, 1996) were favored in the selection process.

Because of the small size of the sample and the unique nature of each property and its residents, noattempt is made to apply a statistical analysis. Rather, findings are based on interviews with avariety of interested parties, and on-site observation of meetings and other interactions completedduring the period January-April 2000.

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Resident participation model: Mutual housing

Foothill Plaza I, Sacramento

98 units, project-based Section 8 subsidyTitle 6 buy-out, 1994

Ownership entity: Sacramento Mutual Housing Association (SMHA)Additional resident board: Foothill Plaza Resident Council

Site and demographics

Foothill Plaza I is a gated apartment complex located just off a shopping strip in a Sacramentoneighborhood which, beyond the busy Auburn Boulevard shopping area, is quietly residential,dominated by small single-family houses and tree-lined streets. 170 adults and 117 children occupythe 98-unit complex, composed of one- to four- bedroom units. Most are immigrant families, with amajority from the former Soviet Union. Many residents have limited English skills; Russian and Viet-namese are the two primary languages for translation.

Foothill Plazas common space includes a community room and office that houses SMHA residentorganizing staff as well as a new computer center. On-site community programs include a welfare-to-work program sponsored by SMHA to coach residents in job seeking skills, a neighborhood watch,English-as-a-second-language classes, and an after-school homework club. Physical amenities includea large playground, ample parking and landscaping. An SMHA resident organizer, SvetlanaKitanov, is on-site at least two days per week.

Ownership and financing structure

Foothill Plaza was acquired in a Title 6 purchase after an owner opt-out in 1994. Residents wereapproached by SMHA as purchaser, approved the sale, and participated in the planning process for

site upgrades, which included converting two units to create the new community room, major rehaband landscaping improvements. Foothill Plaza is one of seven affordable housing complexes ownedby SMHA, and receives a project-based Section 8 subsidy.

SMHA is a non-profit mutual housing association, devoted to providing safe, affordable multi-familyhousing through the acquisition and renovation of troubled properties. The mutual housing model isdistinguished by the emphasis on resident participation, support to multiple properties by a team ofprofessional staff members, and set-aside of the majority of board seats for residents of affiliatedproperties. A single management company is on contract with SMHA to serve all of the associationsproperties. SMHA membership is composed exclusively of residents of the seven affiliated properties.These residents elect SMHA board members, and occupy a majority of seats on the board.

While residents are given a strong voice in SMHA decision-making, they are also asked to contributefour to six hours per month in work, whether social, physical or administrative in nature, to maintaintheir properties. Residents participation is supported by a four-member professional organizingteam, funded through the mutual agency. The organizing department receives roughly one-third ofits funding through operating budgets of the affiliated properties, while two-thirds is covered by short-term grant subsidies.

Resident participation

Currently one resident of Foothill Plaza serves on the SMHA Board of Directors. Others are members

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of SMHA central committees. Board elections take place at SMHAs annual picnic meeting, a highlypromoted event which mixes food and entertainment with the SMHA annual report, board candidateintroductions and elections by residents of the seven affiliated complexes. Those who dont attend thepicnic can vote at home; ballots and written information about the candidates are provided in ad-vance.

Foothill Plaza Resident Council

The Foothill Plaza Resident Council is an internal governing group that is facilitated by the SMHAresident organizer, who also provides English/Russian translation of all written and oral content. Theresident council is composed of 24 cluster leaders, two representing each of 12 clusters of 8-10units, who meet monthly. These cluster leaders take on internal decision-making and are chargedwith disseminating information and seeking the views of their neighbors. Currently, cluster leadersare elected by their neighbors, though some have suggested rotating the role annually. The role ofmeeting chair is rotated amongst cluster leaders, and each meeting chair must assemble an agendabased on information from all cluster leaders.

Tasks that fall under the purview of the Resident Association include ensuring a high level of residentparticipation, event planning, and committee oversight. Residents have a small discretionary budgetof approximately $150 per month, which is built into the Foothill Plaza operating budget and iscontingent on residents completing their work hours and on full occupancy of the building. Spendingproposals must be approved by a majority of all residents. Most recently, these funds were used for acommunity computer purchase.

Resident orientation, training and leadership development

Svetlana Kitanov, SMHAs staff resident organizer who serves Foothill Plaza and two other SMHAproperties, has been working with residents since SMHA first initiated the buy-out process. HerEnglish-Russian bilingual capacity is well used at the complex. She works onsite at least two days perweek, and is available by phone when not physically present. Ms. Kitanov assists cluster leaders and

committees, tries to ensure full resident participation in democratic elections and work-hour participa-tion, and helps resolve problems that have not been resolved by onsite problem-solving mechanisms.

New residents

Foothill Plaza has no vacancies and a long waiting list. Vacancies are filled by lottery. To be addedto the waiting list, new applicants must attend an SMHA orientation session led by a staff organizer.Those who are offered a unit must attend a full family interview with resident leaders, based onSMHA approved questions, before receiving final approval for move-in at Foothill Plaza. While HUDSection 8 guidelines preclude requiring residents to perform work hours, SMHA staff and residentleaders make a great effort to convey to new residents an appreciation for the mutual housing struc-ture and member participation element.

Leadership development

Residents are encouraged to become cluster leaders and committee members. On-site committeesinclude gardening, finance, community watch, newsletter, clean up, youth education and recreation,and resident selection committees. Residents may serve as a basketball coach, translator or any otheractivity based on individual skills and preference. Once residents have successfully served in an on-site leadership role, they are eligible to run for SMHA board membership. The SMHA residentorganizer encourages promising leaders to run for an SMHA board seat. To get on the ballot,prospective board members must attend a board interview. Newly elected board members are given

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a full training and orientation by SMHA staff. The board makes a conscious effort to maintain anenvironment where resident members feel comfortable.

Assessment: Strengths and limitations of the resident participation model

Strength: Ownership rests with a professionally staffed, resident-controlled non-profit corporation

The affordable nature and consistent high-level functioning of SMHA properties is ensured by a non-profit owner with professional staff tending to the complex administrative and financial needs of itsseven member sites. Key advantages of the multi-site structure supporting the central organization arelong-term organizational integrity, access to funding and budget economies based on service tomultiple sites.

Residents are guaranteed ultimate control of SMHA policy-making, since they are given a majority ofthe seats on the board of directors, which makes decisions by majority vote. Any board decision willreflect the interest of the residents, but also represents the views of other board members, who includetwo local government appointees and representatives from business, financial institutions and localadvocacy groups. A strong and consistent board training program, widely attended democraticelections, leadership development opportunities and a universal work-hours commitment at the sitelevel combine to create a system that encourages informed and responsible democratic participation.

Strength: Institutionalized training and outreach services

SMHAs staff structure includes a four-person professional organizing department. Roughly one-thirdof funding for organizing is built into the operating budgets of member properties, with the remaindercoming through grant subsidies. The mutual housing structure and permanent staff positions guaran-tee the continuity of training, from new-member orientation through education and support for emerg-ing leaders, as well as assistance with special events and activities to boost participation. Organiz-ing staff members monitor resident participation and outreach on-site, although much of the hands on

planning and implementation of activities and outreach systems is completed by the residents them-selves. Thanks to the economies and efficiency of serving seven sites through a central supportagency, SMHA has established an environment in which resident access to orientation and traininginformation is consistent, timely and high quality.

Strength: Mutual model precludes isolation of individual properties

A challenge faced by many tenant organizers is helping residents view housing issues in a largercontext than their individual home situation. Bringing together residents of different properties is onevery effective strategy, both for educating and empowering residents, who learn from each othersexperiences. The logistics of hosting multiple resident groups are often daunting. Mutual housing hasthe advantage of providing a guaranteed forum for resident interchange across properties.

Limitation: Mutual housing is susceptible to staff take-over

Although there is no indication that this is the case at SMHA, other mutual housing organizationshave experienced an imbalance in control between residents on the governing board and the staffmembers who report to them. Full-time professional staff members have more expertise in their fieldthan resident board members, and they often come from a more privileged social and educationalbackground than the constituency they serve. Vigilance is necessary to ensure that resident boardmembers receive adequate information and support to fully embrace their governing role.

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Foothill Plaza contacts

Foothill Plaza residents Cindy Collins, member, Property Operations Committee, SMHA Chris Williams, member, SMHA Board of Directors Resident cluster leaders, Foothill Plaza I

SMHA staff Svetlana Kitanov, resident organizer Karl Hilgert, director of community organizing Rachel Iskow, executive director Rick Watson, director of operations

Resident participation model: Limited-equity housing cooperative

Glenridge Apartments, San Francisco

275 units

Title 2 buy-out, 1993

Ownership entity: Glenridge Apartments, Limited Equity Housing CooperativeAssociated organizations: Glenridge Apartments Resident Council

San Francisco Affordable Housing and Preservation AssociationTenant education assistance: None


Glenridge is located in the San Franciscos residential Glen Park neighborhood, close to a largepark. It is a scattered site cooperative comprised of 275 units.


Glenridge was purchased in 1993 by the Glenridge Apartments Resident Council, under the Title 2program. The limited-equity cooperative structure was chosen by a majority of residents, who contrib-ute $1,000 each to purchase a membership share in the cooperative. Residents who decided againstjoining are permitted to stay on as renters from the cooperative, though all new residents are requiredto become co-op members. A resident-controlled non-profit, Glenridge Apartments Resident Councilheld title to the property until 1997, when 51percent of all residents were paid co-op members, anda transfer of legal ownership to the cooperative corporation was possible. As of March 2000, 80per-cent of the households at Glenridge were members of the cooperative ownership cooperation.

During buy-out, Glenridge negotiated an agreement with HUD to preserve the existing income mix onsite, with 50 percent of the units reserved for very low-income households, 25 percent set aside forlow income and 25 percent for moderate-income households. The 75 percent of Glenridge house-holds who are low income receive a Section 8 subsidy. The San Francisco Redevelopment Agencyfinanced $ 8 million worth of rehab on site at the time of acquisition.

In addition to the resident council, Glenridge residents formed a 100 percent resident controlled non-profit housing development corporation at the time of the buy-out. The San Francisco AffordableHousing and Preservation Association managed the conversion and rehab work in 1993. At the

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time, a group of residents was interested in building the non-profit into a full-fledged organization andexpanding preservation work to other sites. That ambition never materialized, partly due to internaldifferences within the group. The non-profit remains today, with a small reserve fund left for theproject, and is currently working to get an agreement to create a loan fund to help finance co-op by-in for members of low-income households who are currently renters at Glenridge.

One Glenridge resident interviewed expressed extreme frustration with HUD officials, observing that

HUD is supportive of management companies and doesnt like tenants. The Glenridge leadershipspent three years fighting HUD opposition to a conversion to cooperative ownership, and took thatfight to the national office in Washington, where they finally found support once Henry Cisneros wasappointed. Washington ordered the regional office to support the conversion effort. Still, the re-gional HUD office reportedly delayed the process of forming the cooperative for more than a year byrefusing to qualify current residents as buyers, based on a lack of assets. The regional office alsodenied a Glenridge operating budget line to pay consultant Kirby Sack, who assisted the groupthroughout the buy-out process to remain on contract as the owners representative.


As a cooperative, Glenridge is owned and controlled by its members, through a democraticallyelected board. Resident leaders express an interest in moving toward self-management, from whatone member described as a mediocre relationship with the current management company. Oneresident, former board member and lawyer Fred Butler, acted as board liaison to HUD, and then washired to serve as owners representative to HUD during the period from 1993 to 1997. Currently,Glenridge board members work directly with HUD asset managers.

The Glenridge board is composed of approximately 15 members, one representative for each streetin the co-op. According to president Carol Burns, the board will soon be reduced in size, as thelarge membership has proven unwieldy. The transition between the original non-profit board and theco-op board - which occurred two years ago once 51 percent of all share purchases were complete -has been a source of conflict amongst members, who expressed some disagreement over whether

seats on the new co-op board should include set-aside seats for existing non-profit board members.


New residents

All new residents are required to purchase a share in the cooperative. After they are screened bymanagement, board representatives meet with new members to discuss participation requirements.


As one co-op member observed, Now the real work begins, training people on how to run a busi-

ness. This is difficult. Not everyone has the background and knowledge to run their own business.Glenridge provides training with outside assistance for all new board members, and requires indi-viduals to serve on a committee before they may run for a board seat.

Assessment: Strengths and limitations of the cooperative model

Strength: Financial self-sufficiency

Beyond receiving SFRA funding for rehab and HUD Section 8 subsidies for low-income residents,Glenridge operates completely independently as an unsubsidized project. The limited-equity

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cooperative structure and income restrictions ensure the long-term preservation of affordability.No private owner is deriving profit from the property, nor is an outside non-profit entity collect-ing administrative oversight funds from the operating budget. The 25 percent of residents wholive in unsubsidized units benefit from the mortgage interest deduction on their personal taxes,just as any homeowner would.

Strength: Resident control and empowerment

Nobody is more motivated to serve the interests of a resident group than the residents themselves. AtGlenridge, residents take full responsibility for oversight of the management company, interacting withHUD and developing policies for the property. Both skilled and unskilled residents have the opportunity toexpand their horizons as they take on responsibility within the cooperative.

Weakness: A lack of universal participation

Twenty percent of Glenridge households still have not formally joined the cooperative. It appears that afairly small, highly able core group has taken on leadership responsibilities over time.

Weakness: Conflict amongst leaders

Core leaders have disagreed over board composition and electoral procedures, as well as use offunds. One board president was elected and later recalled by petition of the community. An on-sitemanager who was also a resident was fired by the board, and filed legal complaints against theboard and several individual members.

Glenridge contacts

Glenridge residents

Fred Butler, president of the San Francisco Affordable Housing and Preservation Association,former Glenridge board member and former owners representative to HUD. Carol Burns, president, Glenridge board of directors

Resident participation model: Resident-controlled non-profit

Astoria Gardens, Sylmar

136 unitsTitle 6 buy-out, 1996Subsidy: Project-based Section 8

Ownership entity: Astoria Gardens Tenants AssociationResident support services: Coalition for Economic Survival


Astoria Gardens is a large, gated complex in a notoriously bad section of Sylmar, in the SanFernando Valley, 20 miles northwest of downtown Los Angeles. Residents tell of the propertys trans-

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formation in the past five years from a crime-infested slum harboring gangs, drugs and prostitution,designated by HUD as a troubled property, to the attractive and pleasant residence it is today.Astoria Gardens residents are almost entirely Latino, and board meetings are currently held inSpanish, since that is the primary language for 10 out of 11 members.


Astoria Gardens is owned by a 100 percent resident-controlled non-profit organization. Residentleaders receive technical assistance, including board training, meeting assistance and HUD repre-sentation through a contract with the Coalition for Economic Survival. They worked with the sameorganizers during their Title 6 buy-out process, which was completed in 1996, leaving theirs as thelast project nationally to benefit from HUDs generous financing arrangement under LIHPRHA. Thesite is subsidized through project-wide Section 8.

HUD and the Los Angeles City Council opposed purchase by the Tenants Association, arguing thatas a troubled property, Astoria posed problems that would overwhelm a resident group. However,as resident organizer Tony Morales notes, There would never be a property so run down or prob-lematic that the tenants shouldnt purchase it. Leaders fought for the property through politicalchannels, and finally were awarded control, along with a substantial Federal subsidy to pay foremploying a security company on site. The property went through a $1.5 million rehab processupon acquisition by the tenant association. During the buy-out period Astoria Gardens residentswere assisted by the California Mutual Housing Association, whose organizers have remained withthem during post-development, as direct consultants or staff with the Coalition for Economic Survival(CES) /LA Center for Affordable Tenant Housing.

Residents and their advocates remain at loggerheads with their HUD Asset Manager, FredMatthews, over approval and payment for continuing improvements on site.


Board of Directors

Residents hold elections for their 11-member board every two years. In the most recent election, inFall 99, a total of26 candidates ran for 11 board seats, and approximately 80 percent of theresident population turned out to vote. Resident organizers from CES monitor the election processclosely, ensuring that nominees have a speak-out night two weeks prior to the election, and thatballots are cast and counted in a fair and democratic fashion. Board meetings are held weekly,with agendas compiled by tenant organizers, based on viewpoints solicited from each board mem-ber.

All spoken and written communications are available in Spanish. Residents recently replaced amanagement company that failed to translate documents into Spanish after many requests. Resi-

dents take an active role in site maintenance and improvements as well, including a buying trip toMexico to purchase tiles.


Astoria Gardens is one of four resident-controlled sites receiving direct assistance from attorneyDavid Etezadi and organizer Tony Morales. The two provide ample hands-on and training assis-tance to Astoria Gardens residents, and have been working with them since before the buy-outprocess.

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In addition to attending and assisting with weekly board meeting and monitoring the election process,the team provides a three-hour training and orientation session to all new board members, anddelivers other training as necessary. For example, when board members began micro-managing theirmanagement company, Mr. Etezadi intervened with training on board and management roles. Whenresidents became impatient with the management company for delaying repairs, tenant organizersgave training on HUD protocols, which included explanation that a six-month delay on HUD approvalfor a repair request was typical.

Residents receive regular training and guidance from their support team, and have been activelyinvolved in the Los Angeles Countywide Alliance of HUD Tenants as well as the National Alliance ofHUD Tenants. While they have access to training, information and policy-makers through these HUDtenant groups, they still have a sense that they are operating in isolation, as one of only five resident-controlled sites in greater Los Angeles. As attorney and consultant Mr.Etezadi said, My fear is thatIll be gone and theyll lose touch and fade away. Theyll forget about resident control.


Astoria Gardens residents seem genuinely thrilled about resident control, and rave about the vastphysical and security improvement at their complex. While they receive ample training and guidancefrom their support team, tenant organizers have observed that at times residents have become overlydependent on them. They have responded by trying to reduce their roles in areas in which they feelresidents could take more leadership.

While board members express themselves with confidence, individual contributions to the meeting, asobserved by this writer, do not consistently reflect a good sense of the scope of the board, an under-standing of the issue under discussion or the realm of acceptable and useful actions. For example,the board president firmly believes that Astoria Gardens residents will be in a position to buy out theirproperty as a private cooperative in a number of years. Considering that residents are living in aSection 8 subsidy situation under which all assets of the complex belong to the non-profit residentassociation, a co-op conversion is impossible.


Strength: Resident empowerment

Astoria Gardens residents are proud, involved, and motivated to continue their work to make theirproperty the best it can be. They have clearly learned a lot about their own capacity in the past fiveyears. Organizer Tony Morales estimates that 10 Astoria Gardens families have moved on to pur-chase their own homes since the buy-out.

Strength: High resident participation

The turnout for Astoria Gardens recent board election is one indicator that residents are engagedand committed to fully participating in the work of running their property.

Strength: Positive relationship with tenant organizers

The affection between residents and their organizing team is easily observed. Organizer TonyMorales is a former HUD resident himself, who rose to self-sufficiency through his leadership withinhis own tenant group some years ago. David Etezadi is a dynamic lawyer and knowledgeableconsultant. The organizers have none of the ownership responsibility a non-profit partner would

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have, and so can advise residents without holding a personal stake in the outcome of resident deci-sions and activities. The only downside to resident trust and respect for this charismatic duo is atendency to become dependent on them.

Limitation: Residents lack the necessary knowledge and background to properlycarry out ownership of a large HUD property

While residents have embraced ownership and operation of their 136-unit complex, they are nottrained professionals in the affordable housing field and have no experience working within HUDregulations. At best, they lack sophistication, and at worst they stray into corrupt activities. HUDpreservation staff member Fred Matthews lists resident mistakes based on inexperience, includingimproper filing of non-profit incorporation documents, a rehab process that exceeded budget andtook too much time, and choosing the wrong people to give them advice. Mr. Matthews sees all fiveresident-controlled non-profit buy-outs in Los Angeles as time-consuming disasters from HUDs pointof view, with Astoria posing the most trouble because it is such a large and historically problematicsite.

Astoria Gardens contacts

Astoria Gardens residents Ten of 11 members of the resident board: Pablo Partida, president; Jose Cervacio, secretary;

Jesus Diaz, treasurer; Maria Chavez, Lillian Delgadillo, Ann Lindley, Joaquin Ortega,Fernando, Perez, Lourdes Romero, Felix Ramirez

Property Management Roberto Sepeda, on-site manager Mauricio Sepeda, assistance manager

Tenant organizers Tony Morales, Coalition for Economic Survival/L.A. Center for Affordable Tenant Housing

David Etezadi, lawyer, consultant to the Astoria Gardens Tenants Association

HUD Fred Matthews, asset manager

Resident participation model: Joint-venture pursuing transition to resident-control

Su Casa Por Cortez, Encinitas

30 units, project-based Section 8 subsidyTitle 6 buy-out, 1993

Ownership entity: Su Casa Housing Association, designed as a joint venture between residents and apartner non-profit; however the non-profit seats have been vacant for the past two years.Additional Resident Board: Su Casa Residents AssociationResident Support Services: San Diego Legal Aid, Adopt-a Building Program

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Su Casa Por Cortez is a 30-unit townhouse apartment complex located in the exclusive SouthernCalifornia community of Encinitas. The site is small and attractive, with ample greenery. Approxi-mately 15 children and 40 adults live on site. A large portion of the resident population is composedof Russian immigrants, many of whom are past retirement age. While 90 percent of the residenthouseholds qualify for Section 8, skills represented amongst the immigrant families include large-scale

property management, electrical engineering and architecture. All materials and meetings are trans-lated into Russian.Residents expressed a high level of satisfaction with their management company, Tarantino PropertyManagement, Inc., on contract since 1998, when it replaced an unsatisfactory management firm.Board members enthusiastically credit their on-site manager with driving criminal activity from theproperty during the early 1990s. They have a close working relationship with management companypresident Wende Tarantino, who not only tends to the physical site and HUD administrative needs,but also has personally trained board members in the basics of HUD housing management.


Su Casa Por Cortez was acquired in a Title 6 purchase in 1993. San Diego Adopt-a-Building Pro-gram tenant advocates worked with the residents to form a resident association and select a non-profit partner for a joint partnership ownership board. As designed, the board composition balancescontrol between three resident board members, three non-profit representatives, and one communitymember. However, the non-profit partner selected during the buy-out, North Coast Housing, ceasedoperation in December 1996. Since that time, the community and non-profit seats on the board havestood vacant.

The bylaws of Su Casa Housing Association, the formal ownership entity, provide for a transition to100 percent resident control any time after the third year of operation, upon request of the Su CasaResident Association. Bylaws stipulate that a request for the withdrawal of the non-profit partner mustbe accompanied by an assessment that the resident association is capable of owning and managing

the property. Any transition would be subject to the approval of HUD and lenders to the property.

While bylaws provide for a supervised transition to resident control, in fact, the non-profit partnerwithdrew and residents took over full responsibility for the complex. During the past three years,residents have taken full control of the property, with the assistance of a well-respected and verysupportive management company. HUD asset manager Victor Grigorian, authorized to make theHUD decision about readiness for resident control at Su Casa, requested residents to identify a newnon-profit partner. Residents prefer full control of the property, and have requested permission toenact the bylaws provision to convert to 100 percent resident control.

Currently residents and HUD are at a stand off. Mr. Grigorian emphasizes HUDs support for residentinvolvement, but notes that until residents can demonstrate to HUD that they are capable of full

board membership without a non-profit, we want them to be involved with a non-profit. HUD hasrequested further documentation of resident capacity before approving a conversion; however thematerial required and basis for approval is subject to much confusion. In my interviews with residents,organizers and HUD, I was told at various times that the key to HUD approval was providing a list ofboard member qualifications and terms, documenting that Su Casa residents had received a completetraining program, and that HUD approval had been withheld because residents were not meetingregularly or filing reports.

Beyond questions of resident capacity, Mr. Grigorian noted that as a 30-unit property, Su Casassmall size translates into a very low budget allocation of HUD oversight funding, which is calculated

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on a per-unit basis. While a large project may be allocated an oversight fee of $15,000 per year,Su Casas oversight contract allocation is too small to provide a financial incentive to a non-profitpartner.


The Su Casa Resident Association coordinates democratic elections of three residents to the Su Casa

Housing Association Board. Board meetings adhere strictly to agenda, and follow Roberts Rules ofOrder. There are no committees on site. Board members characterize Su Casa as a very closecommunity, where roughly 70 percent of the residents contribute in some way, and will attend acommunity meeting when invited.


Su Casa was supported by San Diego Legal Aids Adopt-a-Building affordable housing preservationprogram throughout the Title 6 buy-out process. Adopt-a-Building organizers continue to monitor theunusual resident control situation at Su Casa, as a legal advocate for the tenants. HUD communitybuilder Myrna Pascual Pea, who previously worked with Su Casa as a staff member at the Adopt-a-Building program, encourages residents to apply for a HUD training grant to contract with a residenteducation organization to build their internal capacity.

Currently, Su Casa has no formal board training program. Su Casa Residents Association presidentJoyce Roberts prefers departing board members to train their replacements. Recently, the boardcontracted with the San Diego Coalition of HUD Tenant (SANDCAT) to provide training support intopics related to resident control.


Strength: A capable and reliable property manager supports residents

Wende Tarantino is approachable, accessible and does things right, according to Myrna PascualPea of HUD. Likewise Su Casa residents express a high level of enthusiasm and trust in Ms.Tarantino. Tarantino Property Management handles a number of HUD properties in the San Diegoarea.

Strength: Resident control and empowerment

Su Casa leaders express great satisfaction with their de facto control of their property. With trainingand technical support provided by their property manager, board members express confidence thatthey are fully prepared to take formal control of the property.

Limitation: Resident dependence on a for-profit entity

A fundamental problem with an otherwise very appealing relationship is the basic, profit-motivatednature of Ms. Tarantinos property management business, as opposed to a non-profit affordablehousing mission. When asked about this seeming misfit, residents expressed confidence in theirabilities to protect their own interests and supervise management. They also expressed deep dissatis-faction with the performance of North Coast Housing, their original non-profit partner, and a mistrustof non-profit motives and professionalism in general.

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Su Casa Por Cortez contacts

Su Casa residents Richard Sandf, president, Su Casa Housing Association (SUCHA) Joyce Roberts, president, Su Casa Resident Council and secretary, SUCHA

HUD Victor Grigorian, asset manager Myrna Pascual Pea, Community Builder (and former staff member of Legal Aids Adopt-a-

Building Program)

Property Management Wende Tarantino, Tarantino Property Management Company, Inc.

Tenant advocacy Berta Pasche, San Diego Legal Aid, Adopt-a-Building Program Lorena Moran, tenant coordinator, San Diego Legal Aid, Adopt-a-Building Program

Resident participation model: Joint venture with lower resident involvement than anticipated

Turnagain Arms, Fallbrook

80 unitsTitle 6 buy-out, 1994Subsidy: 22 units have Section 8 contract, remainder have HUD 236 subsidy

Ownership entity: Turnagain Arms Community Housing AssociationAdditional resident board: Turnagain Arms Resident AssociationResident support services: Legal Aid of San Diego, Adopt-a Building Program


Turnagain Arms, a massive mission-style block of 80 apartments, rises from a rural canvas of fruitstands and gas stations. Just off the highway, roughly halfway between Los Angeles and San Diego,Turnagain Arms residents fall into two primary demographic groups: approximately 70 percent areHispanic families, while the remainder are seniors and other single people, most of whom are Anglo.Existence of these two primary demographic groups, differing in family structures, language andneeds, has at times led to ethnic tensions on site.


Turnagain Arms was acquired in a Title 6 purchase in 1994. Of 80 units, 22 are subsidized bySection 8 contracts. The remainder are subsidized through HUDs 236 loan program. At the time ofthe buy-out, San Diegos Adopt-a-Building Program worked with tenants to form a resident associa-tion, and select a non-profit partner to share control through a joint board. As currently configured,two board seats are reserved for Turnagain Arms residents, and two seats are held by the partnernon-profit, Community Housing of North County, and currently occupied by one Community Housingstaff member and the local sheriff. One seat designated for a community representative is currently

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occupied by a resident who was offered the seat by the partner non-profit after her term in a regularresident seat expired.

Turnagain Arms bylaws include a provision for conversion to full resident control starting three years afterthe buy-out. Resident board members express satisfaction with Community Housing and their currentmanagement company, and have taken no steps to assert control. Non-profit staff member Patti Hamic-Christiansen expressed frustration with the low level of resident interest in involvement in governance at

the complex.


Turnagain Arms Resident Association

A resident association has been active at Turnagain Arms since 1998, and has sponsored murals onsite, addressed community safety concerns, and provided programs and equipment for children. ResidentAssociation leaders attended San Diego Foundation workshops on leadership and community building in1999, with the support of Community Housing of North County. While the resident association has beenactive in promoting social programs at Turnagain Arms, interest in participating actively in the gover-nance of the site has been low. Participation in Board elections stood at 20 percent of the residentpopulation in 1999. Resident board members report going door-to-door to assess resident opinions whenan important issue arises.

Other resident initiatives and services

An individual resident and board member, Immanuel Bisrat, works with the teens on site. Currentlyresidents are collecting surplus money from their coin laundry machines to finance a new playground,which will complement a community mural, new basketball hoops and a tetherball set, which arealready in place. A resident service coordinator, secured through AmeriCorps, is on site twice aweek, and provides an after-school learning program for the older children as well as other commu-nity education programs.

Community Housing of North County has supported social programs on site, and financed the devel-opment of a small community room, the Learning Center, to house the complexs after-school programand other educational activities. The Learning Center was recently outfitted with a computer pur-chased by Community Housing through a HUD ITAG grant, for use by children and resident boardmembers on site.


In the past, there seems to have been some confusion over whether Turnagain Arms operating budgetincluded a line item for board training, and other resident education. Community Housing of NorthCounty staff has coached new board members, but no formal training was provided. In 1999 resident

association leaders received training in leadership and community building. This year, with funding froma $30,000 HUD ITAG grant, formal training in governance issues has started, and Community Housinghas contracted for outside assistance with tenant educator and attorney David Etezadi. Workshops willfocus on broadening resident participation before delving into the more technical elements of resident self-management. HUDs Victor Grigorian, asset manager for Turnagain Arms, confirms that funds for indi-vidual training are included in the non-profit oversight line item.


Patti Hamic-Christiansen, community development director at Community Housing of North County,

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reports that the non-profit organization has made a great effort to nurture resident leadership atTurnagain Arms, especially after 1998, once urgent needs for management improvements and crimedeterrence were addressed. One resident board member commented that a number of residents areconfused and think that since the buy-out they own their units. Resident board members appeared tolack a clear understanding of appropriate agenda items for board discussion. While CommunityHousing appears to be doing a fine job managing this property, all indications are that until recently,the organization has fallen short in their commitment to support resident participation and empower-

ment. An increase in the non-profits support for resident training and empowerment may be linkedto an internal change that moved responsibility for resident support from the organizations AssetManagement department to its Community Development department, in order to resolve the naturalconflict of interest that arises when an ownership entity is charged with empowering its tenants.


Strength: Positive relations between resident leaders, Community Housing of NorthCounty and property management

Resident board members expressed high satisfaction with site improvements since the buy-out. Theyalso are very pleased with both on-site and off-site management.

Limitation: Resident participation in governance is low

The low (20 percent) resident turnout for a board election, and lack of Resident Association connec-tion with governance issues, raises questions about the effectiveness of community outreach on site.

Until recently, resident education, outreach and empowerment have been neglected by the non-profitpartner. Residents did not receive any formal education or training from the 1994 buy-out until 1998.That deficiency is reflected in a board dynamic that is dominated by the non-profit partner, with residentmembers who are unclear on appropriate board agenda material. Residents lack the knowledge basenecessary to participate fully in the work of the board. This year, an independent consulting team was

hired to present a series of workshops and support strategies to boost participation.

Turnagain Arms contacts

Turnagain Arms residents Leticia Espinoza, board president Immanuel Bisrat, board member

Community Housing of North County staff Shelley Skirven, asset manager Susan Keatley, assistant asset manager, and resident of Turnagain Arms

Patti Hamic-Christiansen, community development directorProperty management Gail Scott, president, Cuatro Properties, Inc. Rigo, on-site property manager

HUD Victor Grigorian, asset manager Myrna Pascual Pea, Community Builder (and former staff member of Legal Aids Adopt-a-

Building Program)

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Tenant advocacy Berta Pasche, San Diego Legal Aid, Adopt-a-Building Program

Resident participation model: Joint venture, limited resident role

Cedar Gardens, Fresno

146 units, project-wide HUD capital grant subsidyTitle 6 buy-out, 1995

Ownership entity: Cedar Gardens Associates, joint venture ACLC and residentsAdditional resident board: Cedar Gardens Tenants AssociationTenant education assistance: California Coalition for Rural Housing (during buy-out only)


Cedar Gardens is a gated apartment complex adjacent to a shopping complex in Fresno, Calif.Families in the propertys one, two and three-bedroom units are a diverse mix, and include immi-grants from North Africa, Southeast Asia and Latin America.

At the time ACLC acquired the property in 1995, it was a rough-looking site with security andmaintenance problems, described by one visitor as a sparsely landscaped barracks. ACLCworked closely with residents to plan and carry out repairs and upgrades, including installationof security gates, wrought iron fencing and metal screen doors. One three-bedroom unit wasconverted to a community room, which now houses the tenant association, computer center andafter-school program.


Cedar Gardens was acquired in a Title 6 purchase after an owner opt-out in 1995, under a jointventure arrangement between residents and ACLC. Rents are subsidized through a HUD capitalgrant which was selected as more stable subsidy option than Section 8, though it resulted in higherinitial rents than the Section 8 alternative. The California Coalition for Rural Housing (CCRH) pro-vided tenant education during the buy-out process, and assisted residents in choosing ACLC as non-profit partner in a joint venture purchase of their property. Lawyer and tenant advocate DavidKirkpatrick assisted with formation of Cedar Gardens Associates, the new non-profit owner; he alsoprovided training for the initial board of directors, and assisted in negotiations with ACLC.

ACLC is a non-profit housing development organization, incorporated in 1983. Fifty percent of

the seats on ACLCs board of directors are reserved for low-income families or those who servethem. Until Cedar Gardens, their only experience was with new construction, including self-helphousing. Cedar Gardens residents selected ACLC based on their proposed plan for improve-ments and long-term affordability on site. Now, five years after buy-out, and three years aftercompletion of major rehab, residents and non-profit staff members alike express enthusiasticsupport for their mutual relationship as well as the significant physical improvements on site.ACLC provides Cedar Gardens with a resident service coordinator, who runs the computercenter and supports the resident association.

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Within ACLC

One Cedar Gardens resident, who is also past president of Cedar Gardens Associates, serves on theACLC Board of Directors. As ACLC staff member Robert Muoz observes, ACLC is a hands-on ownerthat likes to work with residents. Robert is on-site at Cedar Gardens at least once a month, and knows the

residents. ACLC inspects individual units four times per year.

Cedar Gardens Associates

The formal owner of Cedar Gardens is a joint venture non-profit organization, Cedar Gardens Associates,whose board is composed of three residents and four ACLC board members. Cedar Gardens Associatesmeets twice annually to review ACLC-prepared budgets and plans for the complex. During the buy-outnegotiation process, ACLC made clear its interest in holding majority control of the joint venture body, andlimiting formal resident control of the property. While outside organizers were concerned about this ap-proach, residents and ACLC staff members expressed nothing but satisfaction with the relationship.

Cedar Gardens Tenants Association

The tenant association plans social activities, runs a neighborhood watch, and gives suggestions toACLC. Since completion of rehab and security measures on the property, participation in the tenantsassociation has been low. As resident Buster Rappe explains, When we first started this thing,everyone was interested. Then, everything got done. We got a good place to live.


Once transfer of ownership to the ACLC partnership occurred, outside resident organizers who had donesignificant work at the site felt that their presence was no longer appropriate. ACLC has offered sometraining in the past, including open workshops on bylaws, board roles and responsibilities, and how to run

a residents association. ACLC provides translation of key information into the numerous languages repre-sented at the complex. Recently, however, residents have not been offered formal leadership developmentand training opportunities. They are likewise given little responsibility for management and decision-makingat the complex, although ACLC staff members remain accessible and responsive to residents suggestions.


Strength: Control rests with a highly successful and well-liked, professionallystaffed non-profit corporation

Cedar Gardens residents express the highest level of satisfaction with ACLC and the managementcompany assigned to their site. ACLC was able to complete extensive rehab of the property, partly

because the organizations personnel had the experience and knowledge to convince HUD to fullycover the proposed rehab costs, although that request had initially been denied. ACLCs commitmentto reserving 50 percent of their board seats for affordable housing residents or those who serve themsuggests a legitimate community-base to the organization.

Limitation: The Cedar Gardens joint partnership is virtually controlled by the non-profit partner

Cedar Gardens Associates, formal owner of Cedar Gardens, meets only twice per year, for whatappears to be a budget and operations report by ACLC staff to the resident members of that board.

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While communications on site appear to be open and positive, residents do not take an active role inthe ownership of the property, as they had negotiated to do during the buy-out process.

Limitation: There is no role for neutral tenant education on site.

Cedar Gardens residents have not received training or support from an organization devoted toresident participation and empowerment since buy-out of the property was completed in 1995. Since

no ongoing relationship was established with outside assistance providers at that time, it is now up toresidents, who may not know to ask, or ACLC staff members, who have little incentive to ask, to bringin outside educators to ensure that residents have the basic information and training they need toparticipate meaningfully in the governance of their housing.

Cedar Gardens contacts

Cedar Gardens resident Buster Rappe, member ACLC Board of Directors

ACLC staff Robert Muoz

Tenant organizer Rob Wiener, executive director, California Coalition for Rural Housing

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3. Key players, key issues

Residents HUD Non-profit housing developer or other ownership entity Management company

Tenant assistance groups: educators, organizers and advocatesResidents

Residents of HUD-subsidized housing first require a decent, safe and affordable place to live. Resi-dents of the six properties profiled in this report unanimously express a high level of satisfaction withtheir living situation, regardless of ownership structure. Each property went through a major physicalrehab process in the mid-1990s, thanks to funding available at buy-out through LIHPRHA or ELIHPA.Serious crime and security issues were resolved at four of the six properties through a combination ofphysical and programmatic interventions.

Participation

Beyond sheer funding, the organizing and participation element required by LIHPRHA and ELIHPAserved residents well. Simply knowing ones neighbors is an important step in addressing the fearand isolation that often accompany a lack of financial resources and living options. Key areas inwhich resident groups influence include ensuring community security, and organizing social andeducational programming for children and adults.

Control linked with educationResidents place high value on access to information on physical and financial plans for their home,and having a voice in the activities that will directly affect them. In a buy-out process, outside educa-tional assistance is crucial for residents to be able to contribute meaningfully. The higher the expecta-tions for ongoing democratic control by the residents, the more essential the role of education andinformation sharing.

EmpowermentAs low-income people gain control of their living situation, acquire new knowledge and skills, and getto know their neighbors, opportunities for self-reliance increase. On the property, empowerment isreflected in independent resident initiatives to improve the quality of life. Activities range from makinglandscaping and other physical improvements on site, to developing new social and educationalprograms, to firing an unsatisfactory management company. On the individual level, new knowl-edge, experience and confidence may help residents make the leap to new employment or a non-subsidized home. Beyond individual empowerment, as a group, residents have the opportunity toorganize to influence national housing policy, through a number of channels including the NationalAssociation of HUD Tenants.

HUD

While HUD endorses resident empowerment at the policy level, regional HUD asset managers whowere interviewed expressed a strong preference for working with experienced owners and manage-ment companies. HUD representatives want to be assured of the long-term stability, capacity andintegrity of the owners, developers and managers of publicly subsidized housing. Due to the com-plexity of regulations governing HUD-assisted housing, HUD exerts a strong preference for workingwith established HUD partners.

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While HUD preference for established partners is understandable from the point of view of efficiencyand staff convenience, such preference favors known multi-property owners and managers overnewcomers to the field. Outsiders perceive a strong anti-resident bias at HUD. While LIHPRHA andELIHPA specifically encouraged resident ownership and control on the policy level, each resident-controlled site profiled here (Glenridge, Astoria Gardens, Su Casa) experienced intense oppositionfrom HUD regional office staff members. Glenridge and Astoria Gardens both won resident controlthrough protracted political battle. Su Casa residents are still caught in a tangle of requirements,

though they have been operating independently for the past two years.

Non-profit housing developer or other external ownership entity

Three of the six projects profiled here (Foothill Plaza, Cedar Gardens, Turnagain Arms) include a rolefor a non-profit sponsor. Two of these agencies include a majority of residents on their governingboards (ACLC and Sacramento Mutual Housing Association). HUDs oversight contract with a non-profit owner or partner is a critical factor in making participation attractive. In very small sites, suchas Su Casa, at 30 units, the oversight line item may be too small to cover administrative costs.

HUD personnel and representatives of financial institutions who share a stake in the long-term stabilityof a given subsidized housing complex prefer a professional agency to hold ultimate ownership andcontrol of the site. One HUD asset manager, Fred Matthews, believes that 51 percent of the seats ona joint board should belong to a professional housing organization. HUD community builder, MyrnaPea Pascual believes that while 100 percent resident control is possible with ongoing training, anon-profit sponsor guarantees fiscal and organizational integrity. For success in obtaining financingor managing tax credit investments, California Housing Partnerships Janet Falk points out that institu-tions are seeking an owner with a professional track record.

Sponsoring or partner agencies enter into a range of successful agreements for resident control. Thekey factors in building a sound working partnership appears to be clear and open communications,coupled with an ongoing commitment to resident education. While some resident groups express aburning desire for full control of their property and are motivated to invest the significant effort re-

quired to achieve that, other groups, particularly seniors and disabled residents, prefers site-relatedresponsibilities to be handled by an external agency.

For instance, at Cedar Gardens, residents have a voice in governance at the site, but non-profitsponsor ACLC holds ultimate control. This arrangement is clear to all involved; ALCL manages thesite efficiently, and residents gladly turn their attention to other matters. Conflicts between residentsand their non-profit sponsor generally arise when the partner agency does not honestly communicatethe limits of resident control at the outset, and then is perceived as infringing on resident indepen-dence. When residents do not receive ongoing education, they may forget that their control haslimitations, even if a clear agreement was established earlier.

Management company

HUD gives explicit guidelines to management companies on how to interact with residents, how toshare information, and how to handle complaints. HUD community builder, Myrna Pascual Peasuggests that management companies should require more training to comply with HUD directives.Four of the six sites profiled here (Glenridge, Astoria Gardens, Su Casa, Turnagain Arms) havereplaced their management company during the past four years for non-responsiveness or poor use offunds.

Resident-management relations require a delicate balance in resident-controlled sites; managementhas the professional background and experience to provide authoritative advice on key issues and

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residents often have no other source of information. The result is dependency in which residents maylack the capacity to properly supervise their management companies or monitor management spend-ing to ensure proper use of their funds. Alternately, residents may micro-manage or express unrealis-tic expectations for their management company, for lack of understanding of their contractual relation-ship with management

Management company representatives interviewed for this report uniformly expressed satisfaction

with their work, and reported that they did not consider resident control a problem.

Tenant assistance groups: educators, organizers and advocates

Four independent tenant assistance groups participated as partners in this study: California Coalition for Rural Housing, Sacramento San Diego Legal Aid - Adopt-a-Building Project San Francisco Housing Rights Coalition Coalition for Economic Survival, Los Angeles

The primary role of these tenant organizing groups occurs during the buy-out process, generally

starting when an owner gives HUD notice of a decision to opt out or pre-pay a HUD subsidizedmortgage. At that point, HUD regulations mandate a resident participation process. HUD technicalassistance grants and other funding sources are available to support non-profit assistance groupsdevoted to tenant advocacy to participate in that process. In a typical buy-out, such as the one thatoccurred at Cedar Gardens, an outside educator - in this case California Coalition for Rural Housing -assists the residents as they select a non-profit partner and negotiate for site improvements to beincluded in the rehab process. The negotiating process extends to the development of an MOU,which spells out the terms of site control and resident participation.

Due to the complex and time-sensitive demands of the buy-out process, ample tenant assistance is agiven until the ownership transition is complete. After that, however, as in the case of Cedar Gar-dens, the neutral tenant education group no longer has a formal role on site, and may be perceived

as over-stepping their bounds if they continue in their advocacy role. Therefore, the tenant educationgroup leaves the site, and does not return. This was the pattern at both non-profit dominated buy-outsand resident buy-outs, including Glenridge, and Cedar Gardens. Turnagain Arms and Su Casaresidents continue to have a relationship with San Diego Legal Aid as tenant advocates, but do notreceive educational programming from them. Astoria Gardens stands alone in its link to ongoingassistance from an outside advocacy agency.

Foothill Plaza I, as a member of Sacramento Mutual Housing Association (SMHA), followed a differ-ent resident education trajectory. SMHA staff members provided both buy-out organizing and educa-tion and ongoing support; no outside assistance organization was involved at any time. The SMHAis unique as a hybrid organization that combines the professional staffing and capacity of as typical

non-profit housing developer, with high-level control by residents of the member buildings. While themutual housing model may be susceptible to staff take-over based on either a lack of interest orcapacity by resident members of the board, this does not appear to be the case in Sacramento. Theorganization appears highly responsive and dedicated to resident participation.

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4. Conclusions and recommendations

The project profiles included here must be considered in light of the ultimate goals of affordablehousing preservation. A successful preservation effort ensures long-term affordability on site, whilesupporting the highest possible quality of life for residents. Quality of life starts with decent, safehousing, and can expand to include truly positive experiences in community, and access to trainingand educational resources which may give individual residents the boost they need to move on to

unsubsidized housing. Resident participation and control must be evaluated based on its contributionto the goals of long-term affordability and quality of life on site.

Three central findings and associated recommendations, based on an analysis of sites with a varietyof forms of resident-control, emerge:

1. Preserve a system of checks and balances.2. Institutionalize resident training and outreach.3. Work with HUD to recognize resident groups as legitimate partners.

Finding 1: Benefits and challenges of resident participation in HUD-subsidized housing

The benefits of residents control and participation are recognized by HUD, non-profit affordablehousing developers, resident advocacy groups, and the residents themselves. The diverse interestscommitted to the preservation of affordable housing recognize resident participation as a way to:

Improve the overall management of the property Protect residents interests Create community and a social support system on site Empower residents as a group and individually Give residents the opportunity to build skills based on their participation.

However, as illustrated in the preceding case studies, challenges and limits to resident participationare also apparent: Ownership and governance of HUD-subsidized housing is a complex task, whichrequires a level of competence and sophistication beyond what would be required of home owners ina traditional unsubsidized context. Challenges to resident control include:

Complying with HUD regulations Operating in a multi-lingual, multi-cultural environment The need for capacity building for low-skilled groups.

Recommendation: Preserve a system of checks and balances

Due to the complexity of managing HUD-subsidized housing, and the long-term, public mission of

preserving affordability, residents should not be given full control of their site with no external supportor training. Whether formal ownership is with a 100 percent resident-controlled organization or inpartnership with a non-profit housing organization, safeguards should be in place to protect both thehousing stock and those who live in it.

Maintain the benefits of resident participation and control while instituting a system of checks andbalances through an annual social audit

Institute an annual social audit process for resident groups, non-profit owners and their manage-ment companies, by an outside expert. The audit should be geared to identify shortcomings in

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information-sharing, democratic participation and training. Ideally, the audit would be performed bya tenant education group, which would not only identify trouble areas, but also suggest the means toresolve them. This audit would complement the annual physical inspection of the property andregular financial audits. Should auditors identify a situation of corruption within a governing board,those involved should be mandated to correct the situation or face HUD intervention.

A model for such a system can be found within the Canadian Cooperative movement (Fairbairn et al,

1991), in which a sample social audit process includes assessment of the following elements: Decision-making approach and structure Service performance Use of human resources Community involvement Economic performance.

Mandate oversight of board elections

Where residents enjoy democratic participation on a governing board, bylaws should stipulate that aneutral third party must observe and certify elections. This task might be folded into the annual social

audit process delineated above.

Finding 2: The need for ongoing resident organizing and education

The conversion to resident control is invariably accompanied by ample assistance from outsideexperts, thanks to the availability of HUD and other funding, and the sheer complexity of the situation.Too

Housing Preservation

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